Bigger BCG consultancy to boost push into Asia

Boston Consulting Group is set to expand its recently unveiled digital ventures group to Australia in a move that could see millions of dollars poured into local technology start-ups.

The new digital consultancy, announced by the management advisory firm last month, will hire more than 50 staff at new offices in Sydney this year, in a bid to court work from major telecommunications, media and retail clients in Australia.

It adds to the 300 staff the group already has in the United States and England under chief executive
Jeff Schumacher
, who left rival consultancy Booz & Co after its merger with PricewaterhouseCoopers in December.

“We deliberately want to use [Sydney] as a launch pad into Asia, so we see this as a hub," said
Patrick Forth
, global head of technology, media and telecommunications at BCG.

The digital ventures group aims to pitch for and incubate new technologies and applications for clients.

Mr Schumacher said the group had started work with five major global ­clients, including a bank and an airline, though it was yet to sign an Australian company.

“For the last number of years a lot of our clients have been playing defence [saying] ‘I’ve got to batten down the hatches’," he told The Australian Financial Review. “Now the global economy has started to turn. Technology innovation hasn’t stopped, clients have just slowed down investing in it."

The rise of digital advisories is one of several moves large companies have taken, in addition to internal innovation hubs, which some companies claim do not work effectively. Recently, companies have begun financially backing or becoming heavily involved in incubators for technology start-ups in the hope of acquiring them to bolster existing business models or selling them later for a modest return.

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The move into Australia could see BCG act to inject venture capital funding into local start-ups on behalf of its clients, as well as potentially acquiring the companies to use as part of a wider strategy.

“Putting this capability here will give us access to that . . . we have some very interesting technologies and companies we’re looking at in the US,"Mr Schumacher said.

“A lot of companies fail because they build things and they don’t look out at the market. Companies are generally getting better, but the bar is rising at the same time."

Mr Forth said the company would look to help “bootstrap" the local start-up ecosystem, which has suffered from lack of significant venture capital funding from institutional investors and major companies.